Thank you.
I want to talk a bit more about the housing market. We've seen in Canada for decades now that as interest rates declined—as they did for a long time from the mid-nineties until recently—people whose real wages weren't growing were nevertheless able to bid more to buy a home. They were able to leverage more out of their earnings.
House prices steadily increased. We saw a real explosion during the pandemic, partly because people weren't spending money on other things so they had more money to spend on a home. There was elevated demand because people were now going to spend a lot more time in their homes. They wanted more space; they wanted different kinds of space. Virtual work made possible new areas to live in while keeping the same job. Frankly, there were a lot of couples who broke up during the pandemic too, and that created a certain kind of housing demand, as well as families now requiring two homes instead of one.
Nevertheless, there was a trajectory, pretty steady and pretty quick, of price increases within the housing market. There were also institutional investors moving into the residential housing space as well in a number of different ways, both for single-family dwellings and for larger apartment blocks and things like that.
We haven't done anything to address investment activity in the residential sector. I'm wondering what the bank's opinion is on this if rates start to come down sometime in the next 12 months. As inflation returns to the target range—I think you said by the end of 2024, but we might see 3% sometime in the relatively near future—doesn't that mean the pattern just resumes? Lower interest rates mean that Canadians are able to bid higher on the price of homes, and they'll certainly be encouraged to do that by real estate agents and other actors in that space. What does it mean for the housing crisis to have rates go down again?